Joint Declaration of Stickney and Kessler in Support of Motion for ...

Case 1:09-md-02017-LAK Document 807 Filed 03/08/12 Page 26 of 63
(b)
(c)
(d)
(e)
(f)
The Repo 105 transactions rendered other simultaneous statements made
by Defendants regarding liquidity and liquidity ratios materially false and
misleading when made;
Defendants did not challenge the falsity of their risk management
statements and that according to law, when the conduct involved
misstatements related to mismanagement, the claims are actionable under
the federal securities laws;
According to case law, misstatements concerning the methodology used
for valuing assets constitute representations of fact;
The facts alleged in the Complaint give rise to a “strong inference” of
scienter; and
The risks concealed by the Repo 105 transactions, and Defendants’ related
false statements, materialized with the events leading up to Lehman’s
liquidity crisis and bankruptcy.
38. On July 13, 2010, Defendants filed their respective reply briefs (ECF Nos.
236-38), which consisted of a combined total of 48 pages of legal argument.
39. Lead Counsel continuously monitored the bankruptcy proceedings and the courts
for any recent authority or new information supporting Lead Plaintiffs’ case and the opposition
to Defendants’ motions to dismiss. In this regard, Lead Plaintiffs submitted supplemental
authority supporting their opposition while the motions to dismiss were pending. Moreover, as
explained, Lead Plaintiffs and counsel for the Settling Defendants commenced protracted
settlement negotiations before resolution of Defendants’ motions to dismiss.
40. On July 27, 2011, the Court entered its Opinion on the various motions to dismiss
the Complaint. The Court’s Opinion granted in part and denied in part Defendants’ motions to
dismiss the Complaint. See ECF No. 263. The Opinion also directed Defendants “to settle an
order more fully setting forth the rulings in the Opinion, preferably with agreement from all
parties.” The parties negotiated and ultimately agreed to such a submission, setting forth each of
the rulings in Pretrial Order No. 19. ECF No. 275.
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